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By Mark Milke
and Lennie Kaplan
Canadian Energy Centre

Over the past two years, three insurance companies from Europe – Axa, Zurich and Swiss Re – announced plans to stop insuring Canadian oil sands projects, and reduce or entirely eliminate investments in the oil and gas sector.

The reason offered is the standard refrain: assumed higher carbon emissions per barrel of oil in Canada.


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That ostensible reason has always been shaky. Once you account for economic growth and thus obtain apple-to-apple comparisons of greenhouse gas emissions, emissions intensity has been falling in Canada (by 30 per cent since 2000 per $1 billion of gross domestic product). The decline is also evident in the details, whether measured per person, per unit of GDP, per unit of energy used or per barrel of oil produced.

Mark Milke

Mark Milke

Likewise, emissions intensity in Alberta’s oil sands has been falling and is expected to continue to fall over the next two decades. Between 2011 and 2018, oil sands emissions intensity fell 22 per cent per barrel of oil in what’s known as CO2e (carbon dioxide equivalent).

Beyond these numbers, investors and insurance companies worldwide should take into account another reality: Canada’s numbers are detailed, open and reliable.

In contrast, statistics that emanate from companies located in autocracies or outright tyrannies have questionable credibility. That’s because the closed and often repressive nature of such regimes works against truth-telling. (If you work in Russia for an oil firm, do you want to inform the president of lousy results?)

Here’s one example: The state-owned Saudi Arabian oil firm, Saudi Aramco, was just outed for omitting up to half its carbon emissions impact. “Selective accounting helps burnish the low-carbon claims made on behalf of Saudi oil, which have become a key part of Aramco’s corporate identity,” is how one media report characterized the problem.

Lennie Kaplan

Lennie Kaplan

Beyond questionable statistics from state-owned companies in non-democratic nations, the race to de-insure and divest from Canada’s oil and gas is regrettable – others may use stronger language – when Axa, Zurich and Swiss Re invest and insure in nations with abysmal human rights records.

We matched up rankings from Freedom House, a think-tank that categorizes countries as Free, Partly Free and Not Free (the ratings are based on multiple freedom measurements) with data about where Axa, Zurich and Swiss Re still invest.

Despite announcing a pull-back in their investments in and property and casualty coverage of oil sands projects in Canada, Axa, Zurich, and Swiss Re continue to invest in and provide insurance coverage in multiple Not Free countries. As of 2019, that list included Saudi Arabia, Russia, China, the United Arab Emirates, Turkey, Nigeria, Iran, Iraq, Qatar and Oman.

As of 2019, Axa, Zurich and Swiss Re had $17.9 billion invested in Not Free countries. Those investments included $392 million in Iran, $638 million in Qatar, $1.1 billion in Saudi Arabia, $1.7 billion in Russia, $5.2 billion in China and $6.7 billion in Turkey.

Meanwhile, Axa, Zurich and Swiss Re also wrote insurance premiums in many of those same countries. Those premiums were worth $2.9 billion to the three insurance firms in 2019.

Expand beyond Axa, Zurich and Swiss Re to the entire insurance sector worldwide, and the numbers grow – massively. According to the Insurance Information Institute, non-life premiums, including property and casualty insurance premiums, written for Not Free countries in 2018 totalled about $317 billion.

The insurance industry’s non-life premiums in 2018 (the most recent year available from the Insurance Information Institute) included almost $6.7 billion in Iran, $9.1 billion in Saudi Arabia and over $261 billion in China.

The insurance industry has also written up non-life premiums worth $16.4 billion in Russia. That’s where a court just jailed opposition leader Alexei Navalny. This came after the failed attempt – blamed on President Vladimir Putin – to murder Navalny with poison in August 2020.

Some might push back with how such insurance coverage in Not Free nations is only about 13 per cent of total worldwide non-life premiums.

But that would miss the point: Canada, a cold, northern country with a massive oil and gas sector, has an impressive record on getting carbon emissions intensity down.

On every measurement that should matter to insurance executives and their staff the world over, Canada is a beacon of civil, political and economic rights.

But Axa, Zurich and Swiss Re are divesting and de-insuring a major Canadian industry while helping autocracies and tyrannies stay in business.

Mark Milke and Lennie Kaplan are with the Canadian Energy Centre, an Alberta government corporation funded in part by carbon taxes. They are authors of the report, Insurance Companies Axa, Zurich, and Swiss Re: Divestment in Canadian Oil and Gas Compared with Their Investments in “Not Free Countries.”

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